Damaged Goods: What Amazon’s Battle with Hatchette Could Mean for Comics

It’s been about a month since comiXology’s decision to no longer allow in-app purchases made the comic news rounds. The story never exactly went away so much as commentators became newly distracted with things like that vague Alan Moore announcement for Electricomics, an app that appears to allow you to purchase hype. But in that same amount of time, Amazon’s battle against Hachette Book Group, the third largest publisher in the world, has only grown more volatile.

HBG has a history of battling Amazon and was one of several large publishers indicted in an antitrust suit that found the publishers had conspired with Apple on a price fixing scheme “in order to thwart a discount initiative from Amazon,” according to USA Today and other news outlets. This time around, though, Hachette is the party not only claiming to be a victim, but also claiming to be the friend of consumers, citing unfair business practices by Amazon aren’t just hurting Hachette and its authors, but also readers. Those practices have included slowing down delivery times on Hachette titles and removing pre-order buttons on blockbuster books from the publisher (including JK Rowling’s latest), moves that haven’t just raised the ire of the publishing community but also appear to some critics as an unforgivable violation of Amazon’s customers–first philosophy. The gist is that if Amazon’s long stated goal is to give their customers the best possible experience, how does restricting their access to titles fit into that? And what does that predatory behavior mean for the comics industry?

Amazon’s looming acquisition of comiXology has mostly been celebrated in the comics community, which has viewed the development as a new step towards winning over new readers. The bulk of editorials that have criticized the move have focused on the in-app purchases controversy, specifically the fact that while comiXology’s defenders claimed it was done in order to avoid the 30% cut Apple takes from in app purchases, Amazon is known to take a publisher cut that ranges from 35 to 70% and allows Amazon to alter the price of a title with no notice, at any time. Many critics also pointed out that the move is already complicating what was formerly an extremely simple consumer interaction, forcing new readers who want their product as quickly and easily as possible to jump through new hoops that weren’t there before, and which may now turn them away. Where a new reader could once just click on a button in comiXology to continue buying issues of a series they’re getting into, now they have to go on a browser and purchase the issues through the site. These are all valid points, but Amazon’s ruthless control over what publishers can charge for their product is a more worrisome element that already has a clear history of impact.

Hatchette Book Group CEO Michael Pietsch continues to fight Amazon’s control of the publishing industry.

In the Hachette vs Amazon case, neither side is completely innocent, but for comics it’s important to note that the conflict seemingly rose up over a disagreement over the price of the good in question (specifically e-books). For an industry as price fixated as comics, where a publisher like Dark Horse has to stand down to a legion of irate local comic shop owners after having the gall to price digital lower than print AND release day and date, the comiXology acquisition means that publishers may soon be forced to choose between placating those LCS owners or the behemoth that is Amazon. If the comics industry hopes to continue to expand its readership through digital, there isn’t really much of a choice and the fallout could be far worse than the impact Amazon has had on physical booksellers. But the issue doesn’t end with just LCS owners, it continues over to publishers that have their own digital programs, particularly publishers like Image, which currently offers DRM-free titles on their site.

While digital sales are still a closely guarded secret in the world of comics, it’s understood that they make up a significant number and that that number continues to grow each year. Conversations I’ve had with employees at these publishers have indicated that not only are digital sales strong, the companies have been routinely surprised by how much they increase each year. Given comiXology’s routinely high placement in iTunes app sales charts, and the supposedly huge amount Amazon paid for comiXology, it’s clear digital comics can be an extremely lucrative distribution model but Amazon, which is currently facing dropping stock prices, is undoubtedly going to try to push those sales higher by slashing prices. That is of course speculation, but it’s speculation based on the history of a company built on low prices, that faced down the combined forces of Apple and the largest publishers on Earth over its low $9.99 e-book price and won. In the comics industry, where single issues usually stubbornly sit at $3.99 and sometimes go higher, how much hope do even the largest comic publishers have of standing down Amazon’s price philosophy?

The answer is almost certainly “not very long.” I’ve long felt that digital comics should be priced lower than their print counterparts, especially since the industry continues to argue that print editions are still the edition of choice, but I don’t believe the industry should be forced into changing their prices or face the threat of being shutout by Amazon. With Image in particular, the DRM question could force the publisher to decide between staying true to its fans and creators or accepting Amazon’s unfriendly terms. A battle between Amazon and publishers wouldn’t end with the digital front, as the Hachette war has shown. Amazon’s status as one of the largest retail distributors in history also means it’s free to flex its muscles on the pre-order and shipping front for physical comics. Eagerly awaiting that new Saga trade? Too bad, you’ll need to hold off for four weeks before it gets shipped, unless Image shuts down its store. Enjoying Trees and want to go ahead and pre-order it? No dice. There isn’t a guarantee that Amazon will act this way, of course, but the Hachette battle has shown that Amazon is perfectly willing to play dirty to get what it wants, and if the comics industry wants to come out ahead, it needs to be prepared for all the possible negative outcomes.

Amazon chief Jeff Bezos shows off the Kindle Fire HD

One possibly overlooked negative outcome is the potential for comics to be on the wrong side of the tablet battle. Recent reports have shown that while tablet sales are strong at nearly 80 million units shipped in 2013, the growth is levelling off and some major players, like Amazon, are seeing their sales drop. In 2012, Amazon shipped 5.9 million units, which dropped to 5.8 million the next year, a decrease that’s especially troubling given that Samsung’s tablet sales doubled while Apple maintains near total control of the market with 74.2 million units shipped out of a total 76.9 million tablets shipped worldwide. Amazon’s purchase of comiXology already likely put it on the bad side of Apple but the in-app purchases switch only made it worse. As if that wasn’t enough, comiXology also removed in-app purchase ability from Google Play, which served to further narrow down its market penetration, harming its chances with Samsung’s Droid users. Amazon may be banking on comics to help sell consumers on the Kindle Fire’s visual capabilities and reader friendliness, but it’s unlikely that Amazon will be able to put a dent in Apple’s tablet control.

The comics industry has long been forced to deal with Diamond, a monopolistic distributor that has essentially kept it in a pop culture ghetto, and comiXology was poised to be the digital successor to that throne after the embarrassing collapse of Graphicly. But now it seems that comics and comiXology have both traded out one oppressive market player with not much concern for developing the future of the industry for another. Diamond of course stands to lose more in this situation than anyone else, but with their digital platform still supposedly on the way could the old monopoly use this situation to turn its fortunes around? Diamond Digital already apparently has the Image, Archie, IDW and others on board, and if they can fill the Apple gap comiXology has left, and play off Amazon’s decreasing good will, Amazon and comiXology may have sealed their own fate and given comics the opportunity to settle for the devil they know in order to avoid becoming the comics game Hatchette. Only time will tell.

Nick Hanover got his degree from Disneyland, but he’s the last of the secret agents and he’s your man. Which is to say you can find his particular style of espionage here at Loser City as well asOvrld, where he contributes music reviews and writes a column on undiscovered Austin bands. You can also flip through his archives at Comics Bulletin, which he is formerly the Co-Managing Editor of, andSpectrum Culture, where he contributed literally hundreds of pieces for a few years. Or if you feel particularly adventurous, you can always witness his odd .gif battles with Dylan Garsee on twitter: @Nick_Hanover

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About Nick Hanover

Nick Hanover got his degree from Disneyland, but he’s the last of the secret agents and he’s your man. Which is to say you can find his particular style of espionage here at Loser City as well as Ovrld, where he contributes music reviews and writes a column on undiscovered Austin bands. You can also flip through his archives at Comics Bulletin, which he is formerly the Co-Managing Editor of, and Spectrum Culture, where he contributed literally hundreds of pieces for a few years. Or if you feel particularly adventurous, you can always witness his odd .gif battles with Dylan Garsee on twitter: @Nick_Hanover